LOS ANGELES—A federal grand jury today indicted the owner of an Orange County manufacturing business on a federal charge related to the illegal manufacture and sale of lower receivers for AR-15-type rifles, as well as completed firearms.

The one-count indictment charges Joseph Roh with engaging in the business of manufacturing and dealing in firearms without a license, a felony offense that carries a statutory maximum penalty of five years in federal prison and a $250,000 fine.

The indictment alleges that Roh, 46, of Fullerton, did not have the proper license, but he manufactured and sold hundreds of lower receivers for AR-15-type firearms. In addition to the lower receivers, the indictment alleges that Roh illegally sold complete rifles and pistols.

Through his business, ROHG Industries in La Habra, Roh allegedly started with unfinished lower receivers for AR-15-style firearms. A lower receiver is the frame of a completed firearm that holds the trigger and hammer. An unfinished lower receiver, when machined further, constitutes a firearm. Roh and his employees would finish the lower receivers by machining the devices with a computer-numerically-controlled—or CNC—machine and drill presses that Roh maintained at the La Habra warehouse.

Roh attempted to avoid the licensing requirement by requiring that each customer play a token role in the manufacturing process, which often meant merely pushing a button on a CNC machine, while company employees did the vast majority of the work.

While the sale of unfinished lower receivers is not regulated, the manufacture and sale of completed lower receivers—which are considered firearms under federal law—requires a proper license.

Additionally, Roh would, if the customer wanted, assemble the rest of the firearm by adding an upper receiver, a barrel, and other necessary parts to the lower receiver. Roh has agreed to surrender tomorrow and be arraigned on the indictment tomorrow afternoon in United States District Court.